September 28, 2012

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September 28, 2012

With attorneys and staff worldwide, Bryan Cave attorneys are often quoted in the news. Recent Media Mentions of Financial Institutions Group attorneys include:

Andreassen in Paybefore Update

DC Attorney Kristine Andreassen was noted as contributing to an article in the July edition of Paybefore Update concerning the Consumer Financial Protection Bureau’s proposed policy statement for disclosing consumer complaint information about financial products and services other than credit cards. The bureau’s handling of a consumer complaint database for non-credit card products would closely mirror how it currently discloses credit card complaint data, a process that has drawn criticism. Among objections, the current credit card complaint database publishes “unverified claims” that name the banks, but not any specifics regarding the complaints. Andreassen is a contributing editor to Paybefore.

Atkinson in American Banker

Charlotte partner B.T. Atkinson was quoted August 15 by American Banker regarding election year uncertainty, and how it is affecting M&A work. “The election is more likely to come up in the more red states. They are looking at the election with hope that things will get better, because they believe that it can’t get any worse,” Atkinson said. “The current administration isn’t looking to do much about regulatory relief, and they hope that the new administration will.” Atkinson noted that the Obama administration’s Jumpstart Our Business Startups Act, signed into law in April, has been a boon for many smaller banking companies that will no longer have to report to the Securities and Exchange Commission. “The JOBS Act is tremendous because deregistering saves real money,” he said. “That is one thing that has happened.”

Klingler in The Deal, Law360

Atlanta Partner Robert Klingler was quoted at length July 13 in The Deal and July 23 by Law360 concerning banks holding TARP funds and recent auctions by the U.S. Treasury of its stakes in these banks. The Treasury on July 23 started an auction process involving the sale of preferred stock and subordinated debt positions it acquired in 12 banks as part of the Troubled Asset Relief Program, under which it invested $245.1 billion in 707 financial institutions. The auction will be the fourth of its kind this year. After the current sale, the Treasury still will hold positions in 325 banks. Klingler told The Deal the preferred and sub-debt sale involving the 12 banks is happening now both because market conditions are right and because of the overarching idea that the government was never in the business of investing in private companies. Political motives could be in play, too, he added. “From a Washington outsider’s point of view, I think everything is political,” Klingler said. “The fact that an election is rapidly approaching helps play into that. The fact that the government has received a profit on the portfolio creates additional flexibility for them to say, ‘OK, let’s get out as soon as possible.'” Click here to read the Law360 article.

Klingler in Inc.

Atlanta partner Robert Klingler was quoted August 23 byInc. concerning the pressure small businesses might feel as the Troubled Asset Relief Program comes to an end. The country’s biggest banks have already repaid TARP funds with interest. But about 300 community banks have yet to repay their Treasury loans four years after the bailout began. As Treasury starts to unwind the program, it is raising interest rates and selling its preferred bank shares to private investors. Such moves could further restrict bank lending to entrepreneurs. “The need to repay TARP capital is what depresses [community banks] lending ability,” Klingler said. Click here to read the full article.

McAlpin in American Banker

Atlanta partner Jim McAlpin was quoted Aug. 9 by American Banker concerning the “open bank” deal the FDIC made with Union Bank in Kansas City, Missouri, that called for the FDIC to receive 85 percent of the proceeds of the $456 million-asset bank’s sale to Arvest Bank in Fayetteville, Arkansas. The agreement was designed to satisfy a cross-guarantee liability claim made by the FDIC against Union Bank for the 2011 failure of First National Bank of Olathe in Kansas. First National’s holding company also held a controlling interest in Union Bank’s holding company. The relationship between Union Bank and First National’s holding company allowed the FDIC to hold Union Bank liable for the $120 million First National’s failure cost the Deposit Insurance Fund. The agreement serves as a reminder that the FDIC can recoup losses by going after affiliated institutions, and banks should be aware of the exposure. “There are ways to get out of a controlling position, but you have to take those steps in advance,” McAlpin said.

Moeling in Bank Director

Atlanta partner Walt Moeling was quoted July 20 in Bank Director concerning the decline of banks in Georgia. While more than 400 banks have failed nationally since 2007, few places have felt more pain than Georgia. Through May, 79 banks had failed in Georgia — 22 percent of Georgia’s banks, second in percentage only to Nevada (25 percent), and a greater number than in any other state. In hindsight, Moeling said, the banking industry had become a house of cards, fueled by the “self-deception Of developers, bankers, regulators and economists.” Click here to read the full article. He also was quoted in the same issue on changes to bank boards. With an industry wondering how to grow profits and deal with an increasingly heavy regulatory burden, many boards are assessing the kinds of skill and experience that bank boards will need going forward. Moeling said getting rid of reluctant-to-leave board members is never easy, but it’s a responsibility of the board and the chairman of the governance or nominating committee. “If there is a board member who is weak, the board should deal with that,” he said “Management has enough to deal with.” Click here to read the full article.

Moeling in American Banker

Atlanta partner Walt Moeling was quoted Aug. 30 by American Banker regarding the regulations facing de novo banks, or those open seven years or less. These young banks must file a change in business plans when they hit previously declared targets, expand into a new lending area, open a branch or make an acquisition. Regulators increased scrutiny after many de novos failed during the financial crisis. Some banks that have won amendment approval say it took nearly a year for it to happen, and those that kept growing while awaiting FDIC approval run the risk of violating their existing business plans. “We’ve found that regulators are naturally suspicious of anybody growing substantially faster than their growth share within a market,” Moeling said. “If you’re growing 25% [annually] and everyone else is growing at 2%, are you really that much smarter than everybody else?”

Moeling in American Banker

Atlanta partner Walt Moeling was quoted September 7 by American Banker regarding the dwindling number of banks currently under consent orders from the Federal Deposit Insurance Corp. The FDIC said it issued just four consent orders to banks in July after issuing three a month earlier. Banking analysts estimate that as many as a third of the nation’s banks have received some sort of formal consent order since the onset of the banking crisis in 2008. “The economy is much better — regardless of where you are politically — than it was in 2008,” Moeling said. “At that time, we were in a free fall. Now, it has largely stabilized. So, if you’re going under an order now it is probably because one or two credits just don’t have enough strength to continue to be unclassified.”